FREE ACCOUNTING AND STUDY GAMES ABOUT MA; T3;

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FREE ACCOUNTING AND STUDY GAMES ABOUT MA; T3;

STQ EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -50 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: 16.) Relevant costs in accepting an order at a special price include all of the

following except:

Answer:

fixed manufacturing overhead Question 2: 2.) Croc Catchers calculates its contribution margin to be less than zero. Which statement is true?

Answer:

Its selling price is less than its variable costs.Question 3: 6.) Mackey Corporation has fixed costs of $150,000 and variable costs of $9 per unit.If sales price per unit is $12, what is break-even sales in dollars?

Answer:

$600,000

[$150,000 / ($3 / $12)]

Question 4: 8.) Net income will be:

Answer:

greater if more higher-contribution margin units are sold than lower-contribution margin units.Question 5: 15.) Incremental analysis is the process of identifying the financial data that:

Answer:

change under alternative courses of action.Question 6: 11.) When a company has a limited resource, it should apply additional capacity of

that resource to providing more units of the product or service that has:

Answer:

the highest contribution margin per unit of that limited resource Question 7: 19.) Incremental costs are the costs that differ between the alternatives being considered.

Answer:

True

Question 8: 3.) Which one of the following describes the break-even point?

Answer:

It is the point where total sales equals total variable plus total fixed costs.

Question 9: 4.) The following information is available for Chap Company.

Which amount would you find on Chap's CVP income statement?

Answer:

Contribution margin of $250,000.

($350,000 - $100,000)

Question 10: 23.) If a company decides to eliminate an unprofitable segment, its net income will always increase.

Answer:

False

Question 11: 20.) The basic rule in a sell or process further decision is to process further as

long as the incremental revenue is:

Answer:

more than the incremental processing costs Question 12: 17.) Contribution margin ratio is contribution margin divided by sales.

Answer:

True Question 13: 7.) Sales mix is:

Answer:

a measure of the relative percentage in which a company's products are sold.Question 14: 9.) If Derek buys Item X, he can use its released productive capacity to produce Item Z. Derek will sell Item Z for $12,000 and incur production costs of $8,000. Derek's

incremental analysis should include an opportunity cost of:

Answer:

$4,000.

($12,000 - $8,000)

Question 15: 13.) A high degree of operating leverage:

Answer:

exposes a company to greater earnings volatility risk.Question 16: 12.) In a decision to retain or replace equipment, the book value of the old

equipment is a (an):

Answer:

sunk cost.

Question 17: 19.) Which one of the following describes the break-even point?

Answer:

It is the point where total sales equals total variable costs plus total fixed costs.

Question 18: 3.) In making business decisions, management ordinarily considers:

Answer:

both financial and nonfinancial information Question 19: 24.) The key to making the best decision concerning eliminating an unprofitable segment is to focus on relevant costs.

Answer:

True Question 20: 11.) Walton, Inc. makes an unassembled product that it currently sells for $55. Pc are $20. Walton is considering assembling the product & selling it for $68. The cost to assemble the product is estimated at $12. What decision should Walton make?

Answer:

Process further; net income per unit will be $1 greater.

[($68 - $55) - $12]

Question 21: 21.) If the contribution per unit is $15 and it takes 3.0 machine hours to produce

the unit, the contribution margin per unit of limited resource is:

Answer:

$5 Question 22: 22.) Cost structure refers to the relative proportion of fixed versus variable costs that a company incurs.

Answer:

True Question 23: 2.) Incremental analysis is the process of identifying the financial data that:

Answer:

change under alternative courses of action.Question 24: 22.) When a company is deciding to retain or replace equipment, trade-in value of the existing equipment is irrelevant.

Answer:

False